Australian Dollar Improves
Confidence returns to the market shortly after the crucial vote in Greece last week. With this, the Australian Dollar is at a one-month high on Monday morning.
The local unit has been trading between 106.78 US cents and 107.90 US cents since Friday at 1700 AEST.
According to Mike Hollows, HiFX trading director, the Australian dollar has been trading on the back of broad-based US dollar weakness at a one-month high.
On June 3, the US dollar last traded at 107.74 US cents.
“It certainly had a positive Friday night, supported in broad terms by a number of factors,” said Mr. Hollows.
“Confidence (is) coming back into the market – equity markets and commodity markets all just picking up a bit. There is a little bit more risk taking on the table,” he added.
Eurozone’s finance ministers have cleared the way for the next 12 billion euro tranche of last year’s 110 billion euro EU-IMF bailout last Saturday. This will already enable Greece to pay its bills this month.
Last week, an austerity package that will slash 28.4 billion euros from the government spending by 2015 by the Greek parliament was voted upon.
Mr. Hollows said that the local data that is due to be out on Monday, which includes retail trade figures, building approvals for May, and a Reserve Bank of Australia board meeting on Tuesday, will give the market a lot to digest.
He also added that the local currency may play between 107.50 US cents and 108 US cents on Monday.
“It looks like it’s pretty well supported into 107.50 and then we’ll have to see if it can crack through 108.00. The break of 107.75 on Friday night indicates there is more upside potential here,” said Mr. Hollows.